Friday, July 26, 2013
Monday, March 18, 2013
The US Dollar Devaluation Scheme
We are witnessing these days the greatest Financial Crisis ever due to a US dollar devaluation scheme. It has left many Americans wondering why they are not seeing Armaggedon every single day! The US dollar devaluation scheme is a result of the US led War on Terror. Once NATO took command it became known as the New World Order. This it the scheme formulating behind the US/NATO Missile Defense Shield. (For further reading on the New World Order checkout: Free Yulia Forum! www.soulfreegroup.blogspot.com) This Online Financial Forum (OFF) is our way of telling "The Truth" about the major schemes and opportunities in today's global economy. Let's take a closer look at the US dollar devaluation scheme which has taken many wrong turns since the 2007-2009 recession.
It begins with the credit chaos that caused the Panic of 2008. It's origins go as far back as 2006. That's when housing prices across America first began to turn down, leading to widespread foreclosures on home mortgages and defaults on the securities backed by those mortgages. These defaults brought on the collapse of some of the world's largest financial companies and effectively shut down credit markets around the world. The credit collapse caused a massive reduction in business spending, at the same time that falling house prices forced frightened consumers to slash their won spending. By 2008, this one-two punch of lower "investment" and reduced "consumption" had pushed the US economy in a full-scale panic.
Consequently, US federal spending took on an entirely new dimension known as industrial policy. Industrial policy is a set of government actions that attempt to influence which firms succeed and which fail. In 2009 President Barack Obama put it this way: The government must make "strategic decisions about strategic industries". Congress had already passed a $700 billion bailout package for the financial industry. This was followed by an additional $800 billion federal stimulus package that was designed, it was said, to pull the US out of the recession of 2007-2009. And behind the scenes, the US Federal Reserve (Fed) was busy giving financial institutions more than $1 trillion in government securities in exchange for commercial paper and other risky private-sector debts that could turn out to be largely worthless. Indeed, within a matter of a few months, the US Congress and the Fed had committed American taxpayers to $2 trillion in potential spending obligations.
With traditional monetary policy analysis, when the Fed aggressively adds to the money supply in circulation by buying US government securities, the banking system suddenly has excess reserves. Not wanting to lose out on potential income from those excess reserves, depository institutions increase their loans, the money supply rises, and aggregate demand increases. At least that's the way economists used to tell the story.
QE1, QE2, Operation Twist, and QE3 have all made headlines. Note: "QE1" is a reference to the Fed's expansionary monetary policy that started in November 2010 and so forth! However, there has been a revolution in central banking in the US. Starting on October 1, 2008, the Fed began paying interest on reserves - all reserves, including excess reserves. While some monetary economists for years have argued that interest should be paid on required reserves, none ever demanded that interest be paid on excess reserves, too. This policy change by the Fed converted excess reserves into an income-earning asset for banks, and thus fundamentally altered the nature of the conduct of monetary policy.
If you are the manager of a bank and know that the Fed will pay interest on excess reserves, you are not so keen to loan out those reserves to businesses and individuals. After all, if you make loans to businesses and individuals, you run a risk. During the recession of 2007-2009, that risk appeared to be much greater than normal. Why not just sit back, collect interest checks from the US government on all your reserves, and wait to see what happens?
Well, that is exactly how most banks have proceeded over the past few years. The numbers tell the story. When they didn't earn interest, excess reserves were a drag on bank profits, and so banks kept them to a minimum. Typically, excess reserves for the entire banking system averaged $2 - $3 billion. During 2011 they peaked at over $1.2 trillion, and since then have routinely been from $800 billion and up, depending on the day. Thus, most of the reserves injected into the banking system from 2008 to 2011 ended up not in new loans, new money, and new spending. Instead, they ended up sitting in the form of new excess reserves. That means that the "expansionary" quantitative easing of the Fed was almost completely offset by its decision to pay interest on excess reserves. The result was little increase in aggregate demand and little upward pressure on inflation. These are defensive moves to prevent globalization and stall global governance. This also allows the US War on Terror to transform into the New World Order under President Obama (smiles)! However, the US is now involved in a debt-ceiling crisis.
The US debt-ceiling crisis is a political debate in the US Congress about increasing the US debt ceiling. The decision whether or not to raise the debt limit, thereby increasing the amount that the government can borrow, became a point of political debate in early January 2013. President Barack Obama argued that Congress should raise the debt ceiling without conditions in order to prevent the US from defaulting on government debt. Raising the debt limit was also supported by Ben Bernanke, chairmen of the Federal Reserve. Republicans insisted that an increase in the debt limit should only occur if accompanied by an equal level of spending cuts to reduce the federal deficit. Republican Speaker of the House, John Boehner and the Senate Republican minority leader, Mitch McConnell argued that the debt limit should not be raised unless spending cuts were made reduce the budget deficit in order to prevent future fiscal problems.
The debt ceiling is currently suspended until May 19, 2013. Political debate focused onto the debt ceiling in January 2013, following the signing of the American Taxpayer Relief Act of 2012, preventing the projected "fiscal cliff". The ceiling is a limit set by Congress upon the amount of money the government can borrow for public spending and was set at $16.4 trillion in 2011. The debt limit was technically reached on December 31, 2012, however measures were taken by the Treasury Department to allow spending to continue. According to a letter from Treasury secretary, Timothy Geithner to Congress in mid-January, the department projected that they would exhaust the measures allowing spending to continue between mid-February and early March. Once the debt limit is reached, the Treasury is not able to borrow more money to pay for financial commitments, unless the debt ceiling is raised.
President Obama stated this in a press conference on January 14, 2013. The President stated that not raising the debt limit would cause delays in payments including benefits and government employees' salaries and lead to default on government debt. Republicans have argued that the Treasury can avoid debt default by prioritizing interest payments on government debt over other obligations.
Fitch Ratings has stated that delays in raising the debt limit could result in a formal review of the credit rating of the US, potentially leading to it being downgraded from AAA. Fitch cautioned that a downgrade could also result from the absence of a plan to bring down the deficit in the medium term.
We have found the US actively using "choice words" to describe their actions during what we now call The Great Recession. If words like quantitative easing (QE), Operation Twist, and TARP kept you guessing, here's one more: "The Sequester"! The US dollar devaluation scheme is seeing it's last days before news of a default send shock throughout the global economy. President Obama has signed into effect a wave of steep spending cuts which he has warned could damage the US economy. So far the only sign the US has shown that it will not default at this moment is by making fiscal budget cuts for the remainder of this year known as "The Sequester"!
The sequester was drawn up in mid-2011 as Congress and the White House feuded over raising the debt ceiling and how to slash the huge US deficit. Republicans wanted deep cuts in spending while Democrats insisted on raising taxes. At the end of 2012 Congress and the White House made a dramatic deal that included expiring tax breaks and the sequester to avoid what was dubbed the "fiscal cliff". Republicans agreed to Obama's demand to raise taxes for the rich and Congress postponed the deadline for the budget cuts until 1 March 2013.
However, as the March 1 midnight deadline loomed for the budget cuts, President Obama and Republican congressional leaders still failed to agree on a way to avoid them. The two sides were still at odds over the president's insistence on raising taxes as part of any plan for tackling the country's $16.6 trillion in debt. The sequester will take $85 billion from the US federal budget this year. Those last-ditch talks at the White House to avert the budget reductions before the deadline broke up without agreement. President Obama has warned that the cuts, once fully implemented, would slow US economic growth by half of 1% and cost 750,000 jobs. He said, "We shouldn't be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on".
About half the cuts will come from the defence budget. Incoming defence secretary Chuck Hagel has warned of "significant impacts" on the military. He said the cuts "will cause pain, particularly among our civilian workforce and their families". Mr. Hagel said, "Let me make it clear that this uncertainty puts at risk our ability to effectively fulfill all of our missions. Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed (put on unpaid leave)". Defence officials say 800,000 civilian employees will have their working week reduced. They say they will also have to scale back flight hours for warplanes and postpone some equipment maintenance. The deployment of a second aircraft carrier to the Gulf has also been cancelled. Correspondents say attention will now turn to the next US congressional challenge - a possible shutdown of the US government if no funding bill is passed in the next month. On 27 March a temporary federal budget that has kept the federal government running since 2012 is due to expire.
What does all this mean for the rest of the world who's central banks have US dollars as part of their reserves? It means that if your central bank does not make a 100% back-up of gold per US dollars in its reserves, they'll be left to fork the bill! Is this the price to pay for a New World Order? Keep in mind our Golden Rule: Keep your eyes on the Ruble! To help us analyze how critical Russia's response is we must revisit the Syrian Uprising!
There's no secret that the US and NATO has targeted the Middle East's largest importer of Russian weapons in an attempt to create a New World Order! At least that was the plan if US troops could have trained Afghanistan police and military forces successfully! Russia and the US were involved in a diplomatic war of words last year over Moscow's arms sales to Syria, after Washington accused Russia of supplying attack helicopters to the al-Assad regime. Russia said it will continue selling weapons to Damascus observing both international law and bilateral obligations, while some western countries are pushing for an embargo on Russian arms supplies to Syria.
Russia is facing a "real war" aimed at hampering the country's legal deliveries of weapons in Syria. Russia is also facing plans of a US/NATO Missile Defense Shield that cuts them out of joint-control in a region that's dominated by Russian Weapon Systems! "A real war has been declared against us." says Alexander Fomin head of the Federal Service for Military and Technical Cooperation. Russia's response becomes critical because the US has done absolutely nothing but create barriers to trade for the whole world during the entire dollar devaluation scheme known as the Great Recession. The US has avoided trading globally to the extent that bitcoin peer-to-peer digital currency is their next favorite pick over the US dollar. This fact gives incredible insight into Washington's goal of establishing poorer conditions in a world that's full of debt as its pretense to the "New World" Order! Understand one more important fact that indicates that the US dollar devaluation scheme will result in an attack on American soil. The wars and uprisings that the US, Turkey, Saudi Arabia, Qatar, and NATO members have started in the M. East all stem from the US pursuit of same-sex marriage! Same-sex marriage and gay rights are the policies that form the New World Order and it's the underlining right that the rebels are fighting for whether they understand this or not. Any act of sexual violence left condoned is considered, by the International Criminal Court (ICC), a crime against humanity. Homosexuality alone is a form of willful harm both mentally and physically to a human's body! (For further reading check out our Meet the War Criminals series Parts I - IV here: www.soulfreegroup.blogspot.com)
Our world is dealing with US led barriers to trade, the "New World" Order, and US led crimes against humanity all confined within this Great Recession and the US dollar devaluation scheme. Therefore, we have provided our "best picks" of currency pairs that will reflect these issues in the value of their currencies on the Forex market. Our goal is to keep track of how well Russia can lead the World away from "The New World's" madness! Over the next 12 months (and even beyond) we will provide Forex analysis on the following currency pairs to ensure that we are not trapped by the US dollar devaluation scheme:
Be adviced, gold is the only answer when we're facing a reckless debt-driven economic scheme! We have no explanations for government's who lack the financial discipline to ensure that their currencies maintain a competitive value! The only thing we can say, is that we are all "well OFF"! This is the fundamental idea for participating in this Online Financial Forum (OFF)... we will all be well! Stay tuned next month as we discuss further the opposition to globalization that's creating a dark cloud over Bio-Age! As for now, Russia must not allow itself to be pressured in ending support with the Syrian regime! The fight that al-Assad is in is not an isolated event! It is a part of a greater regional scheme aimed at taking market share away from BRICS nations and beyond!
Special Note: Same-sex marriage is currently being debated by rogue conservatives in Germany. If Germany passes same-sex marriage legislation be prepared to see Europe in dire need of an Healthcare overhaul similar to Obamacare! This compounds the European Sovereign Debt crisis as a healthcare overhaul will be a major expenditure! Note: This is why we see Europe embrassing the idea of more debt! All of these facts puts the Ruble as my favorite pick for the long-run! We'll keep you posted as we proceed into Bio-Age!
It begins with the credit chaos that caused the Panic of 2008. It's origins go as far back as 2006. That's when housing prices across America first began to turn down, leading to widespread foreclosures on home mortgages and defaults on the securities backed by those mortgages. These defaults brought on the collapse of some of the world's largest financial companies and effectively shut down credit markets around the world. The credit collapse caused a massive reduction in business spending, at the same time that falling house prices forced frightened consumers to slash their won spending. By 2008, this one-two punch of lower "investment" and reduced "consumption" had pushed the US economy in a full-scale panic.
Consequently, US federal spending took on an entirely new dimension known as industrial policy. Industrial policy is a set of government actions that attempt to influence which firms succeed and which fail. In 2009 President Barack Obama put it this way: The government must make "strategic decisions about strategic industries". Congress had already passed a $700 billion bailout package for the financial industry. This was followed by an additional $800 billion federal stimulus package that was designed, it was said, to pull the US out of the recession of 2007-2009. And behind the scenes, the US Federal Reserve (Fed) was busy giving financial institutions more than $1 trillion in government securities in exchange for commercial paper and other risky private-sector debts that could turn out to be largely worthless. Indeed, within a matter of a few months, the US Congress and the Fed had committed American taxpayers to $2 trillion in potential spending obligations.
With traditional monetary policy analysis, when the Fed aggressively adds to the money supply in circulation by buying US government securities, the banking system suddenly has excess reserves. Not wanting to lose out on potential income from those excess reserves, depository institutions increase their loans, the money supply rises, and aggregate demand increases. At least that's the way economists used to tell the story.
QE1, QE2, Operation Twist, and QE3 have all made headlines. Note: "QE1" is a reference to the Fed's expansionary monetary policy that started in November 2010 and so forth! However, there has been a revolution in central banking in the US. Starting on October 1, 2008, the Fed began paying interest on reserves - all reserves, including excess reserves. While some monetary economists for years have argued that interest should be paid on required reserves, none ever demanded that interest be paid on excess reserves, too. This policy change by the Fed converted excess reserves into an income-earning asset for banks, and thus fundamentally altered the nature of the conduct of monetary policy.
If you are the manager of a bank and know that the Fed will pay interest on excess reserves, you are not so keen to loan out those reserves to businesses and individuals. After all, if you make loans to businesses and individuals, you run a risk. During the recession of 2007-2009, that risk appeared to be much greater than normal. Why not just sit back, collect interest checks from the US government on all your reserves, and wait to see what happens?
Well, that is exactly how most banks have proceeded over the past few years. The numbers tell the story. When they didn't earn interest, excess reserves were a drag on bank profits, and so banks kept them to a minimum. Typically, excess reserves for the entire banking system averaged $2 - $3 billion. During 2011 they peaked at over $1.2 trillion, and since then have routinely been from $800 billion and up, depending on the day. Thus, most of the reserves injected into the banking system from 2008 to 2011 ended up not in new loans, new money, and new spending. Instead, they ended up sitting in the form of new excess reserves. That means that the "expansionary" quantitative easing of the Fed was almost completely offset by its decision to pay interest on excess reserves. The result was little increase in aggregate demand and little upward pressure on inflation. These are defensive moves to prevent globalization and stall global governance. This also allows the US War on Terror to transform into the New World Order under President Obama (smiles)! However, the US is now involved in a debt-ceiling crisis.
The US debt-ceiling crisis is a political debate in the US Congress about increasing the US debt ceiling. The decision whether or not to raise the debt limit, thereby increasing the amount that the government can borrow, became a point of political debate in early January 2013. President Barack Obama argued that Congress should raise the debt ceiling without conditions in order to prevent the US from defaulting on government debt. Raising the debt limit was also supported by Ben Bernanke, chairmen of the Federal Reserve. Republicans insisted that an increase in the debt limit should only occur if accompanied by an equal level of spending cuts to reduce the federal deficit. Republican Speaker of the House, John Boehner and the Senate Republican minority leader, Mitch McConnell argued that the debt limit should not be raised unless spending cuts were made reduce the budget deficit in order to prevent future fiscal problems.
The debt ceiling is currently suspended until May 19, 2013. Political debate focused onto the debt ceiling in January 2013, following the signing of the American Taxpayer Relief Act of 2012, preventing the projected "fiscal cliff". The ceiling is a limit set by Congress upon the amount of money the government can borrow for public spending and was set at $16.4 trillion in 2011. The debt limit was technically reached on December 31, 2012, however measures were taken by the Treasury Department to allow spending to continue. According to a letter from Treasury secretary, Timothy Geithner to Congress in mid-January, the department projected that they would exhaust the measures allowing spending to continue between mid-February and early March. Once the debt limit is reached, the Treasury is not able to borrow more money to pay for financial commitments, unless the debt ceiling is raised.
President Obama stated this in a press conference on January 14, 2013. The President stated that not raising the debt limit would cause delays in payments including benefits and government employees' salaries and lead to default on government debt. Republicans have argued that the Treasury can avoid debt default by prioritizing interest payments on government debt over other obligations.
Fitch Ratings has stated that delays in raising the debt limit could result in a formal review of the credit rating of the US, potentially leading to it being downgraded from AAA. Fitch cautioned that a downgrade could also result from the absence of a plan to bring down the deficit in the medium term.
We have found the US actively using "choice words" to describe their actions during what we now call The Great Recession. If words like quantitative easing (QE), Operation Twist, and TARP kept you guessing, here's one more: "The Sequester"! The US dollar devaluation scheme is seeing it's last days before news of a default send shock throughout the global economy. President Obama has signed into effect a wave of steep spending cuts which he has warned could damage the US economy. So far the only sign the US has shown that it will not default at this moment is by making fiscal budget cuts for the remainder of this year known as "The Sequester"!
The sequester was drawn up in mid-2011 as Congress and the White House feuded over raising the debt ceiling and how to slash the huge US deficit. Republicans wanted deep cuts in spending while Democrats insisted on raising taxes. At the end of 2012 Congress and the White House made a dramatic deal that included expiring tax breaks and the sequester to avoid what was dubbed the "fiscal cliff". Republicans agreed to Obama's demand to raise taxes for the rich and Congress postponed the deadline for the budget cuts until 1 March 2013.
However, as the March 1 midnight deadline loomed for the budget cuts, President Obama and Republican congressional leaders still failed to agree on a way to avoid them. The two sides were still at odds over the president's insistence on raising taxes as part of any plan for tackling the country's $16.6 trillion in debt. The sequester will take $85 billion from the US federal budget this year. Those last-ditch talks at the White House to avert the budget reductions before the deadline broke up without agreement. President Obama has warned that the cuts, once fully implemented, would slow US economic growth by half of 1% and cost 750,000 jobs. He said, "We shouldn't be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on".
About half the cuts will come from the defence budget. Incoming defence secretary Chuck Hagel has warned of "significant impacts" on the military. He said the cuts "will cause pain, particularly among our civilian workforce and their families". Mr. Hagel said, "Let me make it clear that this uncertainty puts at risk our ability to effectively fulfill all of our missions. Later this month, we intend to issue preliminary notifications to thousands of civilian employees who will be furloughed (put on unpaid leave)". Defence officials say 800,000 civilian employees will have their working week reduced. They say they will also have to scale back flight hours for warplanes and postpone some equipment maintenance. The deployment of a second aircraft carrier to the Gulf has also been cancelled. Correspondents say attention will now turn to the next US congressional challenge - a possible shutdown of the US government if no funding bill is passed in the next month. On 27 March a temporary federal budget that has kept the federal government running since 2012 is due to expire.
What does all this mean for the rest of the world who's central banks have US dollars as part of their reserves? It means that if your central bank does not make a 100% back-up of gold per US dollars in its reserves, they'll be left to fork the bill! Is this the price to pay for a New World Order? Keep in mind our Golden Rule: Keep your eyes on the Ruble! To help us analyze how critical Russia's response is we must revisit the Syrian Uprising!
There's no secret that the US and NATO has targeted the Middle East's largest importer of Russian weapons in an attempt to create a New World Order! At least that was the plan if US troops could have trained Afghanistan police and military forces successfully! Russia and the US were involved in a diplomatic war of words last year over Moscow's arms sales to Syria, after Washington accused Russia of supplying attack helicopters to the al-Assad regime. Russia said it will continue selling weapons to Damascus observing both international law and bilateral obligations, while some western countries are pushing for an embargo on Russian arms supplies to Syria.
Russia is facing a "real war" aimed at hampering the country's legal deliveries of weapons in Syria. Russia is also facing plans of a US/NATO Missile Defense Shield that cuts them out of joint-control in a region that's dominated by Russian Weapon Systems! "A real war has been declared against us." says Alexander Fomin head of the Federal Service for Military and Technical Cooperation. Russia's response becomes critical because the US has done absolutely nothing but create barriers to trade for the whole world during the entire dollar devaluation scheme known as the Great Recession. The US has avoided trading globally to the extent that bitcoin peer-to-peer digital currency is their next favorite pick over the US dollar. This fact gives incredible insight into Washington's goal of establishing poorer conditions in a world that's full of debt as its pretense to the "New World" Order! Understand one more important fact that indicates that the US dollar devaluation scheme will result in an attack on American soil. The wars and uprisings that the US, Turkey, Saudi Arabia, Qatar, and NATO members have started in the M. East all stem from the US pursuit of same-sex marriage! Same-sex marriage and gay rights are the policies that form the New World Order and it's the underlining right that the rebels are fighting for whether they understand this or not. Any act of sexual violence left condoned is considered, by the International Criminal Court (ICC), a crime against humanity. Homosexuality alone is a form of willful harm both mentally and physically to a human's body! (For further reading check out our Meet the War Criminals series Parts I - IV here: www.soulfreegroup.blogspot.com)
Our world is dealing with US led barriers to trade, the "New World" Order, and US led crimes against humanity all confined within this Great Recession and the US dollar devaluation scheme. Therefore, we have provided our "best picks" of currency pairs that will reflect these issues in the value of their currencies on the Forex market. Our goal is to keep track of how well Russia can lead the World away from "The New World's" madness! Over the next 12 months (and even beyond) we will provide Forex analysis on the following currency pairs to ensure that we are not trapped by the US dollar devaluation scheme:
- EUR/USD
- EUR/RUB
- USD/RUB
- EUR/GBP
- CHF/USD
- GBP/USD
- USD/JPY
- EUR/CHF
Special Note: Same-sex marriage is currently being debated by rogue conservatives in Germany. If Germany passes same-sex marriage legislation be prepared to see Europe in dire need of an Healthcare overhaul similar to Obamacare! This compounds the European Sovereign Debt crisis as a healthcare overhaul will be a major expenditure! Note: This is why we see Europe embrassing the idea of more debt! All of these facts puts the Ruble as my favorite pick for the long-run! We'll keep you posted as we proceed into Bio-Age!
Thursday, February 21, 2013
Wednesday, February 20, 2013
Sunday, February 3, 2013
Soul Free Investments Presents: The Truth - Online Financial Forum (OFF)
Next Month Soul Free Investments (a subsidary of Soul Free Group) launches The Truth. The Truth will serve as our Online Financial Forum (OFF), a tool that we will use to correct the current International Trade Balance. We have already found the United States borrowing to avoid both international trade an US corporate outsourcing! Also, gold prices reveal disturbing facts about the current level of hedging involved within a growing and dynamic FOREX market. We must mention now our Golden Rule: Keep your eyes on the Ruble! We will cover a variety of topics in our Online Financial Forum such as:
- The value of the US dollar
- The opposition to globalization that's creating a dark cloud over Bio-Age
- The gold market
- The International Trade Balance and Global Governance
- Free Trade Agreement opportunities inside EurAsia's economy
- The Great Recession and The US Federal Reserves
- US led Wars on Terror and Drugs
- The outlook of major stock sectors and industry groups that shape GDP
- EurAsia regional financial market profile
- A close look at stock market indicators
- GDP, unemployment, and inflation
- Consumer Report
Friday, December 28, 2012
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